Debt

On December 31st, 2018, gross debt reached BRL 3,015 million, an increase of BRL 1,072 million compared to the balance on December 31st, 2017, due mainly to funds raised in the period:

(iii) 7th debenture issuance, classified as a green bond, the first issuance in the transmission segment in this category, in the amount of BRL 621 million.
(iv) New Credit Agreement operations as per Law No. 4,131/62, taking out swap instruments as hedge against foreign exchange variations within the period, in the amount of USD 210 million.

The increase in the Company’s availabilities in the yearly comparison may also be justified by these operations, in addition to the RBSE receipts flow. Therefore, net debt reached BRL 2,317.3 million at the end of December of 2018 vs. BRL 1,326.3 million in 2017. The Net Debt/Adjusted EBITDA ratio was 0.9x in 2018, flat compared to 2017.

The Company is compliant with the established covenants and requirements for all issuances. For the years 2018, 2019 and 2020, the most restrictive Net Debt/EBITDA index is 3.0x. Greater details on financial indicators are available in Attachment V of this document.

The average cost of consolidated debt was 7.9% p.a. on December 31st, 2018 vs. 8.3% p.a. on December 31st, 2017. The average maturity of the consolidated debt on December 31st, 2018, was 3.2 years.

Additional information on the Company’s debt can be found in Explanatory Notes 14 and 15 of the Financial Statements.